Bitcoin and digital currencies may have advantages but these don’t explain their current value.
What does? GREED! There are lots of people getting into the market in order to make money on a virtual currency… Do people make money by simply holding dollars? Not really; it’s a medium of exchange, not an investment vehicle.
I’m absolutely sure the value of Bitcoin will crash, and soon At that point, if it’s allowed to survive at all, it will become the medium of exchange people say it is.
Right now, we’re seeing the final stage of a classic bubble scenario; people who have little idea what Bitcoin is and have no other use for it are piling in, speculating that it will continue to rise in value.
I can’t say when someone will pull the panic lever- but when it happens, millions of accounts will try to liquidate all at once, there will be a Titanic traffic jam as everyone rushes for the exit at the same time- and only those few who got out early will survive unscathed.
Since there is no intrinsic value to the coin- it isn’t backed by banks or governments or even the value of metal it’s stamped from- there is no ‘bottom’. I think it could drop from $20k/Bitcoin to a twentieth of a penny in a matter of hours.
When it does, then and only then will it finally become what its creators and proponents envision; a digital medium of exchange from one investment to another, rather than the asset itself.
We’ll see who’s right; I’m on the side of ‘the end is nigh!’ The only real question I have left is whether Bitcoin will be allowed to survive its fall.
The videos posted here were fascinating, too- there’s about to be an awful lot of excess financially optimised computing power available in the world. I wonder what else one could do with it?
